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If you’re managing a business then keeping track of expenses is probably high on your list of priorities. One of your biggest expenditures is likely to be compensation for your employees. I’m sure you know what you’re paying your people but do you know what they are costing you?

I can’t be sure who your most expensive employee is but I do know it’s likely one of the types of individuals I describe below.

The first is a “manager” of people. That in itself is a problem because people will not be managed. People resist being managed because they are people, they expect leadership, not management.

A manager was explaining to me the challenges of managing a particular new employee. When I suggested that they try leading this particular individual instead of managing them I was more than a little surprised and disappointed by their response.

The manager said employees must be managed before they can be led. They must have the “spirit” managed out of them because people with “spirit” won’t follow anyone. Apparently only people with their “spirit” broken can be “tamed” enough to follow.

I found it almost impossible to believe that anyone could think that way. It was medieval leadership at it’s worst.

It’s also incredibly expensive these days. Disengaged employees cost organizations a ton of money and one of the fastest ways to cause them to disengage is to break their spirit. Make them feel unimportant and they quickly become unproductive too.

No organization that intends to last can afford medieval leadership or management.

The second type of very expensive employee is the know it all manager. They know everything they need to know and they have nothing left to learn.

I talked to a manager a while back who had just lost a very talented team member. When I asked if they had learned anything in the exit interview about why the employee left I was again surprised and disappointed by the answer.

They said that they had nothing to learn from a quitter. They weren’t even interested in looking at the exit interview because “people come and go” and “there is nothing that a manager can do about it.”

The second part might be right… there is nothing a manger can do about it.

But a leader can!

The odds are pretty high that if the employee had felt led they may not have left in the first place. But even if they had decided to go a leader would want to understand why and what they as a leader could have done differently to help the employee want to stay.

Organizations invest a small fortune in recruiting and training their talent. Then they turn them over to a manager who treats them like a piece of equipment; the same as the copy machine.

If you intend for your organization to stand the test of time then you need to invest as much in developing your leaders as you do in developing the people they lead.

Do not allow your leaders to manage people, teach them to lead and they will be a bargain, no matter how much you pay them.